This week the Court of Appeal agreed to depart from the normal costs rule in a case involving a child who had suffered a severe brain injury in a road accident when he was 6 years old. In the case of SG V Hewitt (2012)[2012] EWCA Civ 1053, the appellant (G) appealed against a decision requiring him to pay the costs of the respondent (H) from the date that he accepted H’s Part 36 offer.

G had been injured in a road traffic accident caused by H when he was six years old. He sustained a severe head injury with damage to the frontal lobes of the brain. Medical and other reports were obtained with a view to a claim for damages being made but the experts felt unable to predict what the impact of the brain injury would be until G matured. H made a pre-action Part 36 offer by way of full and final settlement. G accepted the offer after the date of its expiry. The court approved the settlement and costs were agreed. However each party contended that their costs incurred from the date that G accepted the Part 36 offer should be paid by the other party. H relied on the normal costs rule in CPR r.36.10(5) whereas G argued that because of the particular circumstances of his case, the court should depart from the normal costs rule.

G submitted that it was unjust not to depart from the normal costs rule and that in declining to so find, the judge had given no weight, or insufficient weight, to the difficulties caused by the need to wait for him to go through puberty/adolescence. G argued that his situation was not the same as the situations in Matthews v Metal Improvements Co Inc [2007] EWCA Civ 215, [2007] C.P. Rep. 27 and that it could not be said that what happened was a change in circumstances or contingency inherent in litigation. G also claimed that H had made an offer when he had not yet reached an age where a firm enough prognosis for his condition could be given to enable his advisors to advise acceptance of the sum offered and that he had no choice but to wait and to incur costs in obtaining reports on his condition until the point was reached when a more reliable prediction could be made. H submitted that there were good policy reasons not to depart readily from the normal rule so as not to upset the clarity and balance of the Part 36 provisions.

The Court of Appeal decided that G could not have reasonably accepted the offer when it was made because his brain had not at that stage fully matured and therefore a final prognosis could not be given and therefore he should not have been at risk as to costs if he chose to wait. The judge came to the right conclusion in deciding that it would have been difficult for those advising G at the time of the Part 36 offer to have advised acceptance if there was a reasonable alternative strategy available, which there was. The judge adopted the principle in Matthews and found that the fact that any settlement would require the approval of the court was not of itself a relevant factor, Matthews considered. The nearest that he came thereafter to considering the question of approval was his acknowledgement that it would have been difficult to have prepared an advice for approval by the court and that G had acted reasonably throughout. More was required on the facts and the judge had erred in that approach (see paras 50-69 of judgment). Other factors that were relevant were that the offer had been made before G had commenced proceedings at a time when the prognosis was uncertain, for a reason which was necessarily present when frontal lobe damage was caused to a child as was known to both parties throughout. The two stage process of the development of the consequences of G’s particular injury, initial damage and damage developing as the brain evolved in puberty, and the resulting lack of safe prognosis did not fit easily under the ordinary contingency of litigation rubric. In categorising the facts in that way the judge fell into error. It was material that the inherent uncertainty in prognosis would have resolved well before the limitation period expired by the passage of time so G would not need to commence proceedings before the position was clear. The offer was not rejected and H knew that further expert reports were being obtained as to G’s development. The judge’s conclusion did not give weight to the particular features of G’s case. The consequence of omitting to give weight to matters that were in G’s favour was that the normal rule dominated when it should not have done. It was unjust to make the normal costs order. The judge’s order was set aside and an order substituted that G should have his costs throughout.

This decision is a triumph for common sense. In child brain injuries cases; it simply isn’t possible to understand the full extent of the injury until the child’s brain matures. This fact does make impossible to value their personal injury claim and means that it is very dangerous to settle prematurely because of the risk that they will be under-compensated.

Cheryl is a personal injury solicitor with extensive experience in cases involving life changing injuries including brain injury. Cheryl is passionate about representing children who have suffered brain injuries.